Air campaign against Iran threatens Israel’s economic growth

Damage to Israel’s economy from the ongoing air campaign against Iran could exceed 9 billion shekels ($2.93 billion) per week, the Finance Ministry announced.

Under current “red” restrictions imposed by Israel’s Home Front Command—which limit travel to workplaces, order school closures, and mobilize reserve forces—weekly economic losses are estimated at 9.4 billion shekels, largely starting next week, Reuters reports.

The ministry has requested that the Home Front reduce the alert level to “orange,” which allows limited activity and is less restrictive for workplaces. In this scenario, economic losses would drop to 4.3 billion shekels ($1.18 billion) per week.

Israel and the US launched strikes against Iran on February 28, prompting a series of retaliatory attacks across Israel and the wider Middle East, while also disrupting energy exports from the Gulf. US and Israeli officials have warned the campaign could continue for several weeks.

Schools in Israel remain closed this week, public gatherings are banned, and non-essential workforce activity is prohibited, with most employees working remotely.

Israel’s economy, which was somewhat impacted by the Gaza conflict with Hamas, grew 3.1% in 2025. Following a ceasefire in October, growth for 2026 had been projected to exceed 5%, though the current escalation is likely to alter those expectations.

By Vafa Guliyeva